Experiment in Intern. Living, Inc. v. Town of Brattleboro, 1107

• Decision Date: 06 February 1968
• Docket Number: No. 1107,1107
• Citation: 127 Vt. 41,238 A.2d 782
• Parties: The EXPERIMENT IN INTERNATIONAL LIVING, INC. v. TOWN OF BRATTLEBORO.
• Court: Vermont Supreme Court

Page 782

238 A.2d 782

127 Vt. 41

The EXPERIMENT IN INTERNATIONAL LIVING, INC. v. TOWN OF BRATTLEBORO.

No. 1107.

Supreme Court of Vermont.

Feb. 6, 1968.

Kristensen, Cummings & Price, Brattleboro, for plaintiff.

John S. Burgess, Brattleboro, for defendant.

Before HOLDEN, C. J., and SHANGRAW, BARNEY, SMITH and KEYSER, JJ.

SMITH, Justice.

The plaintiff, The Experiment in International Living, Inc. (hereafter designated as Experiment) brought an action in the Court of Chancery for Windham County as a Petition for Declaratory Judgment seeking a determination that the real property owned by the plaintiff in Brattleboro, Vermont, is exempt from taxation by the defendant town, and to recover certain tax payments paid under protest by the plaintiff to the defendant. An answer was filed by the defendant, and the matter was heard by the Chancellor upon an agreed statement of facts. Findings of fact were filed on February 7, 1967, and on June 13, 1967, a judgment order was filed. The Chancellor, in his judgment order, determined that the real property of the plaintiff was not exempt from taxation by the defendant under Title 32, Section 3802(4), Vermont Statutes Annotated. The plaintiff, Experiment, has brought its appeal here from such judgment order.

The findings disclose that Experiment in International Living, Inc., is a Vermont corporation organized on June 30, 1947, with its headquarters in Putney, Vt. Under its Articles of Association, as amended in 1962, Experiment is organized and operated exclusively for educational, scientific and charitable purposes within the meaning of Section 501(c) of the Internal Revenue Code. The purposes of Experiment might be summarized as promoting the mutual understanding between inhabitants of the United States and various foreign countries. This is sought to be accomplished through travel, residence abroad, study of languages, attendance at institutions of learning and the cultivation of social relationships.

Experiment does not have capital stock and is not organized for profit. None of its net earnings inure to, or for, the benefit of any individual and if it shall cease to do business and dissolve, all funds remaining are to be distributed to a non-profit organization.

The program of Experiment is an educational exchange program involving group travel abroad for young Americans who live with foreign families, and bringing young foreign nationals to this country where they live in American homes. There is no membership requirement to be an 'Experimenter', the program being open to any person between the ages of 18 and 30 with good character and personality traits, who would gain by such an experience.

The property in Brattleboro, the taxation of which is here involved, was acquired in various parcels between 1962 and 1965, and has a total area of 47.8 acres. In none of the deeds of conveyance to the Experiment was there any provision or limitation as to the use or purpose for which such lands could be used. The Brattleboro property is used by Experiment to accommodate its School for International Training. This division of Experiment was not formally organized until 1964, and conducts training programs for persons enrolled in the basic Experiment program, as well as such organizations as the Peace Corps, Agency for International Development, the African Scholarship Program of American Universities and for various colleges and universities.

Some of the programs at the School for International Training in recent years included threshold orientation for students coming to United States colleges under African Scholarship Program of American universities; a two-week evaluation of American culture and public education for 30 Japanese schoolteachers; specialized courses and seminars for Venezuelan architectural students and Brazilian medical students, and a twelve-week training program for Peace Corps volunteers bound for five different nations.

Both in dollar amount and number of student days per annum, Peace Corps training constitutes the major proportion of activity at the School for International Training. Experiment's land and facilities are used exclusively for the purposes recited in its Articles of Association. However, such land and facilities have been used upon request by some forty different organizations, including many colleges and universities, as well as such diversified groups as the Rotary Club of Brattleboro, the Vermont State Police, World University Service and the New England Homes for Little Wanderers.

The larger share in dollar amount of revenue taken in by Experiment is derived by contractual arrangement with organiazations, such as with the United States for language and other training given to Peace Corps volunteers selected by the United States for service in foreign countries. Financial support is also received from contributions, foundation grants and endowment income.

In light of the factual background related above, we turn to consideration of the first question presented in the appeal. Did the Chancellor err in holding that the plaintiff's realty is not exempt from local property taxation under the provisions of Title 32, Sec. 3802(4) of Vermont Statutes Annotated, as the owner of real or personal estate granted, sequestered or used for public, pious or charitable uses?

It should be kept in mind that no question is presented here but what Experiment is a non-profit corporation organized for charitable purposes. We are concerned only with the problem of whether its Brattleboro property is entitled to be exempt from taxation under 32 V.S.A. Sec. 3802(4).

Our rule is that in construing statutes of exemption from taxation regard must be had for the settled rule that they are to be construed most strongly against those who claim the benefit. Middlebury College v. Town of Hancock, 115 Vt. 157, 163, 55 A.2d 194. But, while a statute providing for an exemption from taxation is to be strictly construed, the construction must be reasonable and not such as would defeat the purposes of the statute. Troy Conference Academy and Green Mountain Junior College v. Town of Poultney, 115 Vt. 480, 486, 66 A.2d 2.

The findings make clear that the property of Experiment in Brattleboro was not granted or sequestered for public, pious or charitable uses. It follows that the determination which had to be made by the chancellor on this first question presented was the use to which the property was being employed by Experiment.

The pertinent provisions of 32 V.S.A. Sec. 3802(4) are as follows:

'The following property shall be exempt from taxation * * * (4) Real and personal estate granted, sequestered or used for public, pious or charitable uses; * * * and lands owned or leased by colleges, academies or other public schools.'

However, we must also consider the provisions of 32 V.S.A. 3840, for as this Court pointed out in Grand Lodge of Vermont F. & A. M. v. City of Burlington, 104 Vt. 515, 520, 162 A. 368, our statutes relating to tax exemption must be construed as parts of one system. We quote this statute below:

32 V.S.A. Sec. 3840:

'When a society or body of persons associated for a charitable purpose, in whole or in part, including fraternal organizations, owns real estate used exclusively for the purposes of such society, body or organization, such real estate may be exempted from taxation, either in whole or in part, for a period not exceeding ten years, if the town so votes. Upon the expiration of such exemption, a town may vote additional periods of exemption not exceeding five years each.'

In Grand Lodge of Vermont F. & A. M. v. City of Burlington, supra, as well as in Fort Orange Council v. French, 119 Vt. 378, 125 A.2d 835, these two sections have been construed with reference to each other. These cases pointed out that 32 V.S.A. § 3802, formerly V.S. 47 Sec. 649 was originally enacted at a far earlier date than 32 V.S.A. Sec. 3840 (formerly V.S. 47 Sec. 662), and that by the later enactment the general exceptions of the earlier enactment were modified and made less exclusive than the later one. If the facts in a given case are such that a given case falls within 32 V.S.A. Sec. 3840, then the provisions of that section are controlling and there can be no tax exemption without a vote of the town to that effect.

In Fort Orange Council v. French, supra, this Court had for consideration the question of whether the real and personal property owned by an incorporated council of the Boy Scouts of America, consisting of a camp in the Town of Stratton, was entitled to exemption from taxes under then V.S. 47 Sec. 649 (now 32 V.S.A. § 3802(4)). The chancellor who originally heard the case decided, in effect, that because the property was open to the use of Boy Scouts, other than those that belonged to the Council owning the property, it was not used exclusively for the purposes of the plaintiff charitable corporation and that the exemption found in 32 V.S.A. Sec. 3840 applied.

But this Court, in reversing the decree below, held that merely enlargening the use of the camp to Boy Scouts outside the membership of the council owning the property failed to demonstrate that the real and personal property was not used exclusively for the purposes of the organization. The key question presented is whether the property in question is used 'exclusively for the purposes of such body or organization' stated the Court. Such use defeats an exemption unless voted by the town. As was said by Justice, later Chief Justice Hulburd, 'the price of exclusiveness, however praiseworthy in motive, is taxes-unless the town specially votes an exemption.' Fort Orange Council v. French, supra.

In considering whether or not Experiment's property in Brattleboro is used exclusively for the purposes of that organization it is necessary for us to keep in mind that our concern is only with the Brattleboro property which is used primarily to accommodate its School of...